Per Pramod Kumar, A.M. - This appeal is directed against order dated 6th July, 1998, passed by learned CIT(A) XI Kolkata, in the matter of ascertainment of withholding tax liability from remittance made by the assessee to Mr. Frank Rusinko, an American Scientist, on account of consultancy charges.

2. The assessee’s grievance is that the authorities below ought to have held that the remittance in question did not fasten any withholding tax liability on the assessee inasmuch as, on the peculiar facts of this case, the same is covered by the scope of expression ‘independent personal services’ under Article 15 of Indo US Double Taxation Avoidance Agreement. As a corollary to this proposition, the assessee has also assailed the action of the authorities below in holding that the remittance in question is covered by the scope of expression ‘fees for included services’ appearing in Article 12 of Indo US Double Taxation Avoidance Agreement. Although the assessee has taken seven grounds of appeal, these grounds are, in substance, only arguments in support of these propositions. As a matter of convenience, therefore, we will take all these grounds of appeal together.

3. Briefly, the facts. The assessee is an Indian company engaged, inter alia, in the business of manufacturing and/or marketing of graphite electrodes, anodes and other miscellaneous carbon and graphite products. The assessee had appointed one Mr. Frank Rusinko Jr., a resident of the United States of America, as its consultant on retainer basis. As to the scope of Mr. Rusinko’s primary work, paragraph 2 of the appointment letter dated 28th March, 1996 (duly acknowledged copy placed before us at pages 7 and 8 of the paper book) states as follows :

"During the continuance of your appointment hereunder, you shall advise the company’s accredited representative(s) in the USA or, if required, send to the company by post, documentation on matters concerning technology upgradation and development of new products in the field of carbon and graphite, and, without limitation on the generality of the foregoing, shall render to the company consultancy services for improvement of electrodes and nipples quality, particularly in large diameter UHP grade, development of fine grain Isotropic Graphite, EDM Graphite and other Carbon/Graphite Speciality Products."

Paragraphs 6 and 7 of the appointment letter had further imposed the following obligations on Mr. Rusinko:

"6. You shall forthwith communicate to the company and transfer to it the exclusive benefits of and absolute right to all inventions, improved process of manufacture, designs, secret materials, formulas of mixing, improvements in addition to or further inventions relating to the patents or processes of manufacture or products manufactured or being developed by the company or otherwise relating to the business and affairs of the company which you may produce, make, invent or discover or which may come to your knowledge or be communicated to you during the continuance of your appointment hereunder relating to any of the company’s business or products and will give to the company full information as to exact mode of working and using the same and also all such explanations and instructions to the officers and workmen of the company as may be necessary to enable them effectually to work the same and shall from time to time at the expense of the company furnish it with all necessary plans, drawings, models and information for enabling the company to register in its own name any such improvement, invention or additions as the company shall think fit.

7. You shall agree that any and all improvements, inventions and discoveries, whether or not capable or being patented, which you may make either alone or in conjunction with others during your appointment hereunder relating to or in any way pertaining to or connection with any of the products of the company or manufacturing process thereof shall become the sole and exclusive property of th